2019-11-19, 14:11
I långa loppet är försök att manipulera marknaden dömd att misslyckas. Manipulation leder till oförutsedda konsekvenser. Centralbankernas försök att manipulera marknaden med negativ ränta och massiva tillgångsköp medför en felaktig prissättnign av pengar som i sin tur leder till felalokering av resurser.
The central banks are keenly aware that they cannot stimulate economic growth, although they will not state that publicly. The wheel of fortune has completed its revolution. The central bankers are quietly lobbying the political side of the aisle to swing back to Keynesian fiscal policy and reverse austerity.
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Lagarde is steeping into a growing confrontation at a time of rising challenges for central bankers when the economy is turning downward despite all the stimulus and inflation remains subdued. At the same time, interest rates remain artificially low and there are questions over what policymakers have that could do anything to combat a more serious downturn. Lagarde has begun lobbying governments and arguing they need to step in with fiscal stimulus to fill the gap. Central bankers have lost their ability to control inflation or steer the economy while politicians are anything but united in the face of rising political separations and unrest.
Lagarde realizes the economy faces downside risks with inflation in a deflationary position. She has stated it’s “therefore clear that monetary policy needs to remain highly accommodative for the foreseeable future.” While she pretends that the ECB can cut interest rates further despite already being at a record-low -0.4%, she also realizes it is causing massive problems. It has become a deterrent for the euro to be considered a reserve currency. There have been other side effects from keeping rates well below zero for too long, such as promoting a pension crisis nobody wishes to address publicly for fear of creating a panic. She acknowledged these problems stating that the “ECB has hit the effective lower bound on policy rates, it is clear that low rates have implications for the banking sector and financial stability more generally.” Lagarde further acknowledged that “it will be essential to closely monitor whether adverse side effects may emerge in the future, the longer low interest rates are in place.”
(www.armstrongeconomics.com - Legarde-ECB-Euro/)
The central banks are keenly aware that they cannot stimulate economic growth, although they will not state that publicly. The wheel of fortune has completed its revolution. The central bankers are quietly lobbying the political side of the aisle to swing back to Keynesian fiscal policy and reverse austerity.
- - -
Lagarde is steeping into a growing confrontation at a time of rising challenges for central bankers when the economy is turning downward despite all the stimulus and inflation remains subdued. At the same time, interest rates remain artificially low and there are questions over what policymakers have that could do anything to combat a more serious downturn. Lagarde has begun lobbying governments and arguing they need to step in with fiscal stimulus to fill the gap. Central bankers have lost their ability to control inflation or steer the economy while politicians are anything but united in the face of rising political separations and unrest.
Lagarde realizes the economy faces downside risks with inflation in a deflationary position. She has stated it’s “therefore clear that monetary policy needs to remain highly accommodative for the foreseeable future.” While she pretends that the ECB can cut interest rates further despite already being at a record-low -0.4%, she also realizes it is causing massive problems. It has become a deterrent for the euro to be considered a reserve currency. There have been other side effects from keeping rates well below zero for too long, such as promoting a pension crisis nobody wishes to address publicly for fear of creating a panic. She acknowledged these problems stating that the “ECB has hit the effective lower bound on policy rates, it is clear that low rates have implications for the banking sector and financial stability more generally.” Lagarde further acknowledged that “it will be essential to closely monitor whether adverse side effects may emerge in the future, the longer low interest rates are in place.”
(www.armstrongeconomics.com - Legarde-ECB-Euro/)
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